Dayton says special session should include repeal of farm equipment tax

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August 8, 2013 - 12:40 PM

On a rainy day at the Farmfest agricultural trade show on Thursday, Gov. Mark Dayton said that he supports repealing a new farm equipment tax during a special session next month.

The repeal would bring some sunshine to farmers, who have complained about the harm the $28 million tax would bring.

"It was a very bad mistake," the DFL governor said. He said the tax slipped into the massive tax bill at the end of session with little notice. "No one wants to take responsibility for it. I was not aware of it, my staff was not aware of it until the next morning when the tax bill was already buttoned up."

Dayton said that he supports Democrats proposal to use the upcoming special session, designed to approve state funds to pay for recovery from a June storm that ravaged the state. The governor said he and staff are currently looking at a one-day Sept. 9 session but did not yet have complete sign off on the timing.

The governor said he would like to see lawmakers approve a repeal of the farm equipment tax and have the repeal be retroactive to July 1, when it went into effect. He said he would need agreement on the repeal from all four legislative leaders before he would be willing to add the item to the special session agenda.

On Thursday, House Speaker Paul Thissen and Senate Majority Leader Tom Bakk wrote to Republican leaders asking them to sign off on a special session agenda that included both storm relief and a farm tax repeal.

"There is strong bipartisan support for both measures," the leaders wrote to their Republican counterparts.

Dayton admitted that his support for a equipment tax repeal would expand the special session agenda, which he recently said should be limited only to storm-related issues. But, he said, "I'd rather be right than consistent.," a quote he and many others attribute to Winston Churchill.

Dayton said he remains unfriendly to the idea, pushed hard by Republicans, of repealing the new warehouse tax during the special session. He said he has invited the GOP to come up with a new source of income to replace that tax but none have come forward.

Although he said he did not support that new tax, which would bring in about $92 million to state coffers through the rest of the budget cycle, he does not now support dealing any repeal immediately. That tax does not go into effect until next April, which would give lawmakers enough time to rescind it next year if they decide to go in that direction, he said.

"We’ve got to keep a lid on this otherwise it is going to pop off and we will be there until Christmas," he said. If opponents come up with a source of revenue to replace the expected tax revenue, however, he said he would be willing to listen.